After shocking quarter, IBM insists that AI isn’t killing the mainframe
Quick Answer
IBM reported disappointing earnings with $17.2 billion in revenue, missing Wall Street expectations, largely due to a 42% drop in mainframe sales.
Quick Take
CEO Arvind Krishna insists this is a temporary setback, attributing the decline to customers reallocating budgets amid rising hardware costs driven by the AI boom.
Key Points
- IBM's mainframe business saw a 42% decline, impacting overall revenue.
- The company lowered its full-year growth forecasts following the poor quarter.
- Mainframe customers opted for alternative hardware due to rising costs of 15% to 30%.
- IBM's stock plummeted 25%, marking its largest single-day decline ever.
- CEO Krishna claims no evidence of clients moving away from mainframes.
Source Excerpt
After IBM's stock crashed last week on warnings of a poor mainframe sales, the CEO explained that AI wrecked corporate hardware budget, temporarily.
Want this in your inbox every morning?
Daily brief at your local 8am — bilingual EN/中文, free.
More from TechCrunch
See more →
Why the first GPU financiers are turning to inference chips in a $400 million deal
General Compute secured a $400 million loan from Upper90, using inference-specific chips as collateral, signaling a shift towards cost-effective AI infrastructure. Their SN50 chips promise 16x faster inference than traditional GPU clouds, highlighting a growing market for open-source AI models and alternatives to Nvidia.
